Letter from Paris: French Resistance

First impressions can be deceiving. When Anheuser-Busch committed a reported $20 million as one of 12 official sponsors of the 1998 World Cup in November 1995, it knew there was a catch: a 4-year-old French law forbidding TV broadcasts of alcohol and tobacco advertising--in any form--originating from France.

Still, the world's largest brewer and maker of Busch Beer, Budweiser and Michelob was hopeful. A-B thought it could bend loi Evin (the Evin law, named for Claude Evin, a former health minister) and find a way to stick its Bud billboards in French stadiums--signage expected to be seen by some 37 billion television viewers cumulatively around the world during the monthlong soccer frenzy. That's more than twice the number of viewers who saw the Atlanta Olympics.

But A-B's dream of megaviewers has been shattered, for the time being, by French authorities and the European Union in Brussels. Bud's desire to bend French law strikes many Europeans as wildly arrogant. Thus, their message to the St. Louis executives cut to the chaser: This Bud's for you--not for us. Was Budweiser's confidence grossly miscalculated?

After all, so popular is the World Cup in Europe that many countries virtually shut down during the games. Moreover, despite the legal restrictions, there had been exceptions to the Evin law before. Of course, Budweiser isn't taking its defeat lightly. It enlisted the help of FIFA,

Federation of International Football Associations, in Zurich, Switzerland, and the World Cup parent organization. Keith Cooper, a FIFA spokesman, says that 'FIFA assured A-B it would continue to take up matters with French authorities at an opportune moment.'

To understand Budweiser's frustration regarding World Cup '98 (A-B will also be a sponsor at the 2002 and 2006 tournaments), a condensed history of the Evin law is in order. As originally constructed, it forbade all forms of alcohol and tobacco advertising.

Not surprisingly, the uproar which followed in tobacco and liquor industry circles slowly gave rise to a number of legal exceptions. For example: In 1993, an amendment permitted the televised transmission of cigarette and other signage at the Formula One auto races, which originated from other countries.

Why the exception? Racing officials warned that unless a hands-off policy was established for heavy-duty sponsors, such as Marlboro, the sport would cease to exist. Could that argument work in Bud's favor? Car racing is a national sport in France.

Budweiser is an American company. In short, the World Cup will survive--with or without Bud's participation.

In 1994, a second amendment to Evin was adopted. It permitted alcohol billboards on French territory, including sports stadiums. The end of the problem for brands such as Budweiser or Beaujolais Nouveau? Hardly. The law continued to prevent French television networks, such as TF1 or FR2, from beaming these matches into French homes if alcohol signage is present. Given the restrictions, why did Budweiser agree to sponsorship? Philippe Villemus, director of marketing for the French World Cup Organizing Committee, points out that World Cup sponsorship means far more than simply TV signage. 'They get logos on products, tickets, hospitality,' he says. 'TV is not a big issue, though it is important.'

Villemus himself suggested that Budweiser be braced for French resistance. 'I suggested a double scenario for Bud,' he explains. 'Have the boards and be ready to go if the law changes. If not, be more creative in your marketing program.'

Is it any wonder that Budweiser was optimistic, given the schizophrenic nature of the ruling? For instance, the government could not stop non-French alcohol or tobacco marketers from placing their signage in stadiums outside the country. In essence, 'foreign beers can advertise (on TV broadcasts into France) but not French beers,' laments Bernard Brochand, president of DDB International in Paris, which handles Budweiser.

Brochand, who is also president of the Paris-St. Germain (PSG) French soccer club, noted that as recently as last month, PSG was squaring off against the Liverpool team in England. 'Liverpool is sponsored by Carlsberg,' he says. 'We are tryingto find a manageable system (for Budweiser) in the World Cup.'

Still, France isn't the world. An NBC or the BBC can broadcast Budweiser signage to viewers abroad, right? Wrong. All worldwide broadcasts pass through a single feed, provided by TVRS, a largely French consortium, which is currently forbidden to train its cameras on alcohol signage in the stadiums. Thus, no matter who transmits, all have to follow French law.

But Anheuser-Busch has been doing its best to convince French officials that another Evin exception is warranted. Stephen J. Burrows, president and chief operating officer of A-B, says, 'The French law restricts our World Cup sponsorship, not just in France, but in every other market around the world. We believe it was never the intention of French lawmakers to place such restrictions on advertising that appears in other countries, yet that is the unfortunate effect of the law in this situation...(We) continue with our discussions with French officials to find a solution to our problem.'

And certain government ministers are sympathetic to the problem. 'We were encouraged by comments made by the sports minister, who said they will try and find an acceptable solution,' adds Tony Ponturo, vice president of corporate media and sports marketing at Anheuser-Busch. 'We are hoping for at least an exception (on TV broadcast restrictions) for the World Cup.' The likelihood of declaring an exception is, at best, unclear, given the growing influence of anti-smoking and anti-drinking lobbies in France, as well as the fact that both French President Jacques Chirac and Prime Minister Alain Juppe voted for the Evin law when it was originally adopted. Early legislative elections called by Chirac for late May or June may push FIFA's 'moment' to influence matters still further.

A-B executives were not content to leave their multimillion dollar World Cup investment solely in the hands of French officials.

Last year, the company and DDB argued that Evin violates the European Union's treaty on the free movement of services in a complaint filed with the European Commission in Brussels.

Budweiser's action followed two earlier suits lodged by different French wine and spirits trade groups. The Eurocrats wasted no time in bumping A-B's complaint to the top of the pile--then quickly rejected it as invalid, notes DDB's Brochand.

'The commission considered that in this specific case, the restrictions imposed on free movement of services were proportionate to recognized general interest objectives of protecting public health,' says Elisabetta Olivi, a spokeswoman for the EC. In other words, Brussels 'is mesmerized by the mad cow disease syndrome, since health is so preeminent today in consumer consciousness,' explains Jacques Bille, general director of the AACC, the French advertising agency trade association. 'This is bad, the other complaints lose strength, as well as putting Bud on the shelf.'

In addition, Olivi discounted the impact a green paper brought before the EC concerning questions of commercial communication might offer Anheuser-Busch. If accepted this summer, the paper only 'opens debate on questions concerning commercial communication,' she says. Even if ultimately accepted, 'it will never delete the need for the commission to study complaints on a case-by-case basis.'

The way things stand now, A-B is left to ponder several options. 'Our lawyers are examining if an appeal to the EC is possible,' says Brochand. A-B could also consider a relatively new transmission system, in which computer technology can black out certain billboards in French television feeds but not elsewhere, a technique that has been used with some success to date.

Ponturo says the brewer is considering this measure as a last resort. 'We're examining virtual technology to see if it's a viable option. The question is whether it would be viable over the course of a 30-day contest.' Some soccer officials, however, say that Budweiser is contractually forbidden to use the technology.

Naturally, Budweiser could take a more provocative approach: flaunt the Evin law by sticking Bud posters in the stadium, betting that French authorities would not risk the ire of French television viewers by pulling the plug on one of the world's single most important, passion-inspiring sporting events. One insider says this scenario is an actual possibility. 'We could try this during a pre-match contest and see what happens,' he admits.

Ponturo says it is still too early to formulate contingency plans. 'We're staying with the sponsorship,' he notes. 'We are trying to keep a positive attitude and stay aggressive--in a gentlemanly way.'

First impressions can be deceiving. When Anheuser-Busch committed a reported $20 million as one of 12 official sponsors of the 1998 World Cup in November 1995, it knew there was a catch: a 4-year-old French law forbidding TV broadcasts of alcohol and tobacco advertising--in any form--originating from France.

Still, the world's largest brewer and maker of Busch Beer, Budweiser and Michelob was hopeful. A-B thought it could bend loi Evin (the Evin law, named for Claude Evin, a former health minister) and find a way to stick its Bud billboards in French stadiums--signage expected to be seen by some 37 billion television viewers cumulatively around the world during the monthlong soccer frenzy. That's more than twice the number of viewers who saw the Atlanta Olympics.

But A-B's dream of megaviewers has been shattered, for the time being, by French authorities and the European Union in Brussels. Bud's desire to bend French law strikes many Europeans as wildly arrogant. Thus, their message to the St. Louis executives cut to the chaser: This Bud's for you--not for us. Was Budweiser's confidence grossly miscalculated?

After all, so popular is the World Cup in Europe that many countries virtually shut down during the games. Moreover, despite the legal restrictions, there had been exceptions to the Evin law before. Of course, Budweiser isn't taking its defeat lightly. It enlisted the help of FIFA,

Federation of International Football Associations, in Zurich, Switzerland, and the World Cup parent organization. Keith Cooper, a FIFA spokesman, says that 'FIFA assured A-B it would continue to take up matters with French authorities at an opportune moment.'

To understand Budweiser's frustration regarding World Cup '98 (A-B will also be a sponsor at the 2002 and 2006 tournaments), a condensed history of the Evin law is in order. As originally constructed, it forbade all forms of alcohol and tobacco advertising.

Not surprisingly, the uproar which followed in tobacco and liquor industry circles slowly gave rise to a number of legal exceptions. For example: In 1993, an amendment permitted the televised transmission of cigarette and other signage at the Formula One auto races, which originated from other countries.

Why the exception? Racing officials warned that unless a hands-off policy was established for heavy-duty sponsors, such as Marlboro, the sport would cease to exist. Could that argument work in Bud's favor? Car racing is a national sport in France.

Budweiser is an American company. In short, the World Cup will survive--with or without Bud's participation.

In 1994, a second amendment to Evin was adopted. It permitted alcohol billboards on French territory, including sports stadiums. The end of the problem for brands such as Budweiser or Beaujolais Nouveau? Hardly. The law continued to prevent French television networks, such as TF1 or FR2, from beaming these matches into French homes if alcohol signage is present. Given the restrictions, why did Budweiser agree to sponsorship? Philippe Villemus, director of marketing for the French World Cup Organizing Committee, points out that World Cup sponsorship means far more than simply TV signage. 'They get logos on products, tickets, hospitality,' he says. 'TV is not a big issue, though it is important.'

Villemus himself suggested that Budweiser be braced for French resistance. 'I suggested a double scenario for Bud,' he explains. 'Have the boards and be ready to go if the law changes. If not, be more creative in your marketing program.'

Is it any wonder that Budweiser was optimistic, given the schizophrenic nature of the ruling? For instance, the government could not stop non-French alcohol or tobacco marketers from placing their signage in stadiums outside the country. In essence, 'foreign beers can advertise (on TV broadcasts into France) but not French beers,' laments Bernard Brochand, president of DDB International in Paris, which handles Budweiser.

Brochand, who is also president of the Paris-St. Germain (PSG) French soccer club, noted that as recently as last month, PSG was squaring off against the Liverpool team in England. 'Liverpool is sponsored by Carlsberg,' he says. 'We are tryingto find a manageable system (for Budweiser) in the World Cup.'

Still, France isn't the world. An NBC or the BBC can broadcast Budweiser signage to viewers abroad, right? Wrong. All worldwide broadcasts pass through a single feed, provided by TVRS, a largely French consortium, which is currently forbidden to train its cameras on alcohol signage in the stadiums. Thus, no matter who transmits, all have to follow French law.

But Anheuser-Busch has been doing its best to convince French officials that another Evin exception is warranted. Stephen J. Burrows, president and chief operating officer of A-B, says, 'The French law restricts our World Cup sponsorship, not just in France, but in every other market around the world. We believe it was never the intention of French lawmakers to place such restrictions on advertising that appears in other countries, yet that is the unfortunate effect of the law in this situation...(We) continue with our discussions with French officials to find a solution to our problem.'

And certain government ministers are sympathetic to the problem. 'We were encouraged by comments made by the sports minister, who said they will try and find an acceptable solution,' adds Tony Ponturo, vice president of corporate media and sports marketing at Anheuser-Busch. 'We are hoping for at least an exception (on TV broadcast restrictions) for the World Cup.' The likelihood of declaring an exception is, at best, unclear, given the growing influence of anti-smoking and anti-drinking lobbies in France, as well as the fact that both French President Jacques Chirac and Prime Minister Alain Juppe voted for the Evin law when it was originally adopted. Early legislative elections called by Chirac for late May or June may push FIFA's 'moment' to influence matters still further.

A-B executives were not content to leave their multimillion dollar World Cup investment solely in the hands of French officials.

Last year, the company and DDB argued that Evin violates the European Union's treaty on the free movement of services in a complaint filed with the European Commission in Brussels.

Budweiser's action followed two earlier suits lodged by different French wine and spirits trade groups. The Eurocrats wasted no time in bumping A-B's complaint to the top of the pile--then quickly rejected it as invalid, notes DDB's Brochand.

'The commission considered that in this specific case, the restrictions imposed on free movement of services were proportionate to recognized general interest objectives of protecting public health,' says Elisabetta Olivi, a spokeswoman for the EC. In other words, Brussels 'is mesmerized by the mad cow disease syndrome, since health is so preeminent today in consumer consciousness,' explains Jacques Bille, general director of the AACC, the French advertising agency trade association. 'This is bad, the other complaints lose strength, as well as putting Bud on the shelf.'

In addition, Olivi discounted the impact a green paper brought before the EC concerning questions of commercial communication might offer Anheuser-Busch. If accepted this summer, the paper only 'opens debate on questions concerning commercial communication,' she says. Even if ultimately accepted, 'it will never delete the need for the commission to study complaints on a case-by-case basis.'

The way things stand now, A-B is left to ponder several options. 'Our lawyers are examining if an appeal to the EC is possible,' says Brochand. A-B could also consider a relatively new transmission system, in which computer technology can black out certain billboards in French television feeds but not elsewhere, a technique that has been used with some success to date.

Ponturo says the brewer is considering this measure as a last resort. 'We're examining virtual technology to see if it's a viable option. The question is whether it would be viable over the course of a 30-day contest.' Some soccer officials, however, say that Budweiser is contractually forbidden to use the technology.

Naturally, Budweiser could take a more provocative approach: flaunt the Evin law by sticking Bud posters in the stadium, betting that French authorities would not risk the ire of French television viewers by pulling the plug on one of the world's single most important, passion-inspiring sporting events. One insider says this scenario is an actual possibility. 'We could try this during a pre-match contest and see what happens,' he admits.

Ponturo says it is still too early to formulate contingency plans. 'We're staying with the sponsorship,' he notes. 'We are trying to keep a positive attitude and stay aggressive--in a gentlemanly way.'